Welcome back to the third and last installment of utilizing digital learning and analytics for a successful sustainability transformation.
Last week, we shared some ideas here on how digital learning and analytics can help overcome resistance and create awareness and ownership during sustainability change projects. This week we focus on why sustainability is no longer a business case that needs to be made and how digital learning and analytics can ensure a successful implementation.
The world is changing. Climate threat is on everyone’s lips and awareness of societal imbalances around the world has increased with digitalization. It is undeniable that the global system in place needs to adapt to these changing times.
The integration of national economies into a global economic system, i.e. Globalization has been one of the most important developments of the last century. This process has led to remarkable growth in trade between countries marking an era of wealth, reduction in poverty, and expansion in the ranks of the middle class. The current global economic integration, including free trade and higher cross-border investment, helps markets and societies to prosper, with health and education improving significantly in many parts of the world.
On the flip side it’s true that the same system has also produced major societal imbalances, and at this point in time, with the current nature of globalization, in terms of the speed, extensiveness, and impacts on the earth system, the system in place is unsustainable.
Sustainability has been a growing term used for promoting international cooperation in finding solutions to issues that pose a threat to the global economy. Businesses should turn to the new global sustainability agenda. This is arguably the best stand against current societal and environmental threats and challenges and presents extraordinary opportunities to make a positive global impact.
Sustainability is no longer a business case to be made; it’s a smarter way of doing business that is proven by research and business cases to benefit companies in numerous ways.
Sustainability means working together to solve the global problems that pose a threat to our people, environment, and economies. With supply chains extending around the world companies become more vulnerable to social and environmental risks. Civil conflict, poor labor conditions, natural disasters, and water scarcity are examples of sustainability concerns that can have a direct effect on company earnings. What happens if that risk is underestimated?
In the case of the Californian PG&E the repercussions of underestimating the likely frequency and severity of extreme weather events were catastrophic. It has been widely referred to as the first climate change bankruptcy.
More companies are recognizing that the primary focus of business is no longer to drive shareholder value but to work in the interests of all stakeholders, including employees and communities. Corporate giants like Nestlé and Mars have invested in Rainforest Alliance certification to ensure the long-term supply of their agricultural products and report improvements in productivity and net income. Sustainability represents a new collaborative approach to risk management that can drive stronger, more sustainable strategies to make business more resilient for the changes to come.
Investing in sustainability is not only a risk management tool; it can also drive innovation.
When creative thinkers start building products according to the guidelines of sustainability they take into account the product life cycle and value chain. This gives more ideas of improvements to be made during the product’s life and opportunities for cost savings or efficiency further down the value chain. That is why redesigning products to meet environmental standards or social needs offers new business opportunities through innovation.
Engaged employees and new talent
Companies that have a record demonstrating positive environmental and social impact can find it easier to attract and retain quality employees and motivate them by creating a sense of purpose. Multiple studies have shown that over 70% of employees
… say their job is more fulfilling when they are provided opportunities to make a positive impact at work
… say they are more likely to choose to work at a company with a strong environmental agenda.
… say that a strong sustainability plan would affect their decision to stay with a company long term.
In a study conducted by Net Impact, 72 percent of students about to enter the workforce agreed that “a job where I can make an impact” would be important to their happiness. Most would even take a pay cut to achieve that goal.
With millennials making up the largest portion of the workforce today and their consumer spending worth $1trillion, implementing sustainability could ally your company with a very demanding generation. A generation concerned with finding meaning where they work and aligning their work with their own values.
It’s long been observed that employees with a sense not just of satisfaction but also of connection perform better. Sustainability has the power to create this connection for employees and produce a more engaged workforce.
When considering that sustainability factors into employees’ sense of purpose, it is worth noting that employee satisfaction is positively correlated with shareholder returns. Alex Edman at the London Business School identified a correlation between companies that made the Fortune’s “100 Best Companies to Work For” list and their stock returns per year. Generating 2.3 percent to 3.8 percent higher returns than their peers over a period greater than 25-years.
With the rise of younger generations as consumers, companies are seeking ways to retain these new customers. It’s the generation of purpose seeking customers that look to brands that identify with their values and needs. These same generations are the ones that are amping up the importance of sustainability.
Studies show that customers that support a brand over time will spend 67% more than new customers. According to CGS, the second most important reason to return to a brand is its sustainable/ethical business practices. Marking yet another benefit of sustainability and shedding light on the future of business.
E-learning and data collection
The link from sustainability issues to value creation is solid. In a world where environmental and social concerns are becoming more urgent, the new sustainability agenda has become a necessity for companies that want to succeed long term.
Using e-learning and data collection is one way to implement sustainability in a cost effective and engaging manner. The data collection focused e-learning from Incept Sustainability is designed to help increase internal engagement and analyse key sustainability challenges. The software is built on a bottom-up approach, increasing the impact and success rate for sustainable change projects by involving all organizational levels. The method prepares employees for the transformation with engaging learning modules, collecting feedback, and presenting analytics for action.
If you want to know more about the software of Incept Sustainability, feel free to contact us for more details.